Online gambling, fantasy sports apps may shut down in Karnataka from tonight

The controversial Karnataka Police (Amendment) Act, 2021 is set to come into effect from tonight, forcing all gambling websites to shut shop within the state. The law was passed by Karnataka’s legislative assembly last month and makes all forms of wagering and betting illegal in the state, including online gambling. 

The new law will force all kinds of gambling platforms to stop operating in the state, including platforms like Dream11, Mobile Premier League, rummy and Poker apps to stop doing business in the state. 

“The Karnataka Police (Amendment) Act, 2021 has received Governor's assent & comes into force immediately. The new law bans online games involving betting or wagering & removes exemption for betting or wagering on games of skill. Law is sure to be challenged in courts,” said Jay Sayta, a lawyer who advises multiple gaming companies in the country. It has been opposed by industry organizations already.

“IAMAI is of the view that the bill may hurt Karnataka’s position as the country's startup hub and lead to the loss of jobs and revenue for the state. There are 92 gaming companies registered in Bengaluru, which employ over 4,000 people,” said industry body the Internet and Mobile Association of India (IAMAI) in a statement on September 21. “In the past three years, international investors have invested around INR 3,000 crores in gaming and animation startups in the state,” it added.

The Confederation of Indian Traders (CAIT) and other industry organizations have also written letters to the state. 

The new law will force all kinds of gambling platforms to stop operating in the state, including platforms like Dream11, Mobile Premier League, rummy and Poker apps to stop doing business in the state. It also provides for imprisonment of three years and a penalty of up to Rs. 1 lakh for those caught gambling in Karnataka.

Karnataka’s new act comes into force just over two months after the Tamil Nadu high court struck down a similar legislation by that government. While the Tamil Nadu government also wanted to ban online gambling in the state, the court called it unconstitutional. S. Raghupathy, Tamil Nadu’s law minister, had said that the state intends to formulate a new law to ban these platforms.

Gambling in India is a state subject, which means that states can choose to make it illegal within their borders. However, gaming platforms and other concerned bodies have often cited Supreme Court rulings which have specifically called termed games like Rummy has games of skill, and hence put them outside the ambit of gambling laws.